Data Leakage: How To Stop The Waste

Victor Wong CEO Thunder CMPThis article originally appeared on

While DMPs, social networks, and advertising giants like Facebook and Google struggle to combat data leakage with the unauthorized transfer of their data to the outside world, a more insidious type of leakage is draining ad dollars largely unchecked.

Advertisers and agencies are investing a great deal in targeting technologies like DSPs and DMPs, which account for about 30 percent of the $20 billion being spent globally in programmatic. Even so, only a small percentage of programmatic campaigns have creatives that completely match each targeted audience. In fact, up to 97 percent of programmatic campaigns lack a targeted creative for each audience segment, according to research by AppNexus.

Factoring all those numbers, we’re talking about $6 billion wasted on investments in data-driven targeting. That also means that more than $14 billion is spent on underperforming programmatic media. Brands are spending significant budget to deliver a targeted message to a particular audience, but more often than not, they’re failing to activate the data they’ve been collecting.

Brands can’t afford this prolific data waste, and they know it; 91 percent of brand marketers today are concerned about driving ROI from big data. So how can publishers, agencies, and advertisers stop the waste?

Activating Data

The solution certainly isn’t to stop investing in data. Rather, brands must now shift focus from collecting their data to activating their data. Think of collecting data faster than activating data like having buckets of water filling up faster than you can use it; there will be spillage and waste. You don’t just throw out the water because you can’t use it. You need to think of how to change your process to be more efficient.

Technology largely created this problem. Generating huge buckets of data gave us near-limitless options for segmenting audiences to target. Technology will largely fix the problem by enhancing collaboration across marketing and business teams–and it will also speed execution.

Rethinking Teams And Technology

CMOs are now rethinking their teams and technology to activate their data. They are hiring data scientists and analysts who can look at piles of idle data and glean performance insights for marketing teams to shift strategies around. They have started to bring DSPs and DMPs in-house in a bid to speed up taking action by having direct control. Still, the biggest gains to be had are more creative to feed the myriad targeting options inherent in this data deluge.

Sure, a call for scaling-up creative used to strike fear in the hearts of budget-conscious CMOs. After all, creative has historically been driven by human capital. But exactly how many people can you throw at the problem?

Increased Creative Output

The next step for CMOs is to spin up more creative output capacity using technologies like a creative management platform (CMP), as well as transforming existing roles so the same people can do more. The same team responsible for creating and targeting audience segments can be empowered to create unique messages for those segments. The same person who used to ensure legal compliance could now directly insert copy if it was made easy enough to do so. Everyone can help with the creative by just getting a few controls in place, including cloud-based storage and easy interfaces to take action.

This isn’t all going to happen overnight, but the world’s most advanced marketing organizations are beginning to transform themselves. Just last month, IPG’s Mediabrands division and Initiative media agency announced that they had hired their first global chief creative officers. These hires signal a growing recognition that media targeting needs more creative capabilities to match it.

Until brands close the gap between targeting capabilities and creative capabilities, they will continue to throw away their investments in data. The bill is now $6 billion and growing.
About Victor Wong

Victor Wong is CEO of PaperG.